The author is a Forbes contributor. The opinions expressed are those of the writer.

Loading ...

Loading ...

This story appears in the {{article.article.magazine.pretty_date}} issue of {{article.article.magazine.pubName}}. Subscribe

Workday shares are getting a big boost from Pacific Crest analyst Brendan Barnicle, who asserted in a research note this morning that the cloud-based provider of HR software could eventually be worth as much as $15 billion, or about 60% more than the level at last week's close.

Barnicle asserts that based on the company's total addressable market and growth rate, Workday could have $6 billion in revenue and almost $2 billion in free cash flow over the next decade, a level which he thinks supports a $90 stock price.

He puts the company's addressable market at $50 billion now, growing to more than $70 billion by 2015. "When you factor the hardware and services that Workday is providing to its customers, the company’s TAM is over $100 billion, approaching $200 billion," he adds.

The analyst contends that Workday's shares could get extra support from the fact that the two founders own more than 60% of the company's stock.

"As a result, the float is very limited for WDAY," he writes. "In addition, Workday’s founders have a voting agreement in which one will vote the other’s shares if one of them predeceases the other."